Director: Ruidoso Down's Hubbard Museum of the American West could be profitable

The hope is the darkest days, or perhaps better phrased as the period of red ink, are behind the Hubbard Museum of the American West.

"We have moved in the right direction," Jim Kofakis, the director of the museum owned and operated by the city of Ruidoso Downs said in an interview on Monday. "I have been saying for two years that payroll was a problem - not because everybody was overpaid but if your revenues aren't there and you've cut as much as you can on day-to-day expenses of what you buy to open the doors, and you've cut that down to absolute minimal and you're still in trouble, then there's really no where else to turn."

Kofakis said the city council's decision last month to trim salaries and reduce the number of positions at the museum was the right thing to do.

"I kind of take everything down to a personal level and say, 'Well, I make $100 a month, I can't spend $200 because at a certain point with credit cards and everything else, I'm in trouble.' I'm I guess a fiscally responsible conservative constitutionalist. It's very clear what we can and can't do and what we should and shouldn't do."

Deficits had grown

Kofakis said there were indicators early on that things were on shaky financial ground.

"And really, the first signals should have came in the second year because you went from a $258,000 surplus to a $25,000 deficit. So in a one-year period it was almost a $300,000 swing.

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That's when the first oversight should have been like, 'OK, like what happened?'"

The third year of city ownership showed a museum with a surplus of almost $119,000, though Kofakis noted there were a couple of unexpected donations.

"And then the real red flag was year four (fiscal year July 1, 2008 through June 30, 2009). When you finish the year 100-grand in the hole, (even) with help from the (city's) general fund, every bell and whistle and alarm should have gone off."

Kofakis said there was a collective breakdown of oversight.

The next three years continued to register deficits that ranged from $192,000 to $338,000.

The real panic started early this year with the realization that $1.5 million that museum donor R.D. Hubbard included with the 2005 transfer of the museum to the city was depleted.

"When I asked the former mayor how much he thought was left, and he said $560,000. I'm like, there's no way. It's been used to cover deficits, which is OK, that's what the money was there for."

But the reality was stark. "We don't have any of the Hubbard money, there's not even enough to finish the fiscal year (ending June 30, 2012) and that's when it became a panic," Kofakis said.

The museum director, who last month had his own salary trimmed by 25 percent, said he wants it clear that monies provided by racetrack owner R.D. Hubbard and the Hubbard Foundation has been used for the museum.

Who has paid?

Additional figures released by the museum indicate admissions, gift shop sales, grants, memberships and fundraising, including the July gala fundraiser that amasses more than $100,000 each year, have provided $3.7 million dollars or just over 58 percent of the $6.4 million in total revenues over the past seven years of city ownership. R.D. Hubbard and the Hubbard Foundation have delivered slightly more than 23 percent of the revenues. The Ruidoso Downs lodgers tax fund has advanced more than 10 percent and the city's general fund another 7.5 percent over the period. Since the city acquired the museum, some $689,000 in lodgers tax money, and $484,000 in general fund money, has been moved from the two city accounts to the museum.

With the latest payroll cuts, Kofakis said the 58 percent level of self sufficiency will increase.

"In this year's fiscal year budget (not part of the seven years of past financial data) there's still $110,000 worth of lodgers tax, which is restricted use money. And yes, I know it can be used for other city-owned tourist attractions like parks. We don't get all of it but we get a big portion of it. The Hubbard Foundation contribution was budgeted originally at $100,000. Through lots of lobbying on my behalf asking for more I asked for another $55,000 and the final tally was $175,000."

Kofakis said those funding sources are anticipated to remain the same in future years. But because of the recent payroll cuts the income from the admissions and the other direct museum revenue sources should cover a higher percentage of expenditures.

"Through five months of this fiscal year (July through November) we've already hit almost 60 percent of the revenue for attendance," Kofakis said. He noted he did not have actual November revenues but included them as a good guess. While future expenditures have been trimmed, missing will be transfers from the now depleted $1.5 million provided when the museum was gifted to the city in 2005. Kofakis said that has been factored in the current budget, which now includes couple of transfers from the city's general fund.

"One temporary, one permanent from the general fund," the director noted of the transfers. "If we hit all of our projected revenue items and we have a very realistic shot of hitting those, we should end the fiscal year with a small surplus."

More changes

Kofakis said since Ruidoso Downs was given the museum in 2005, it has lost some of its touch with the local community. He said that has resulted in lost revenue opportunities.

"Before the city took over there were parties here. There were weddings here. There were a lot of social things that happened at the museum," Kofakis said. "And that stopped. My recommendation on a change to the business model is to go back to doing weddings, doing dances. Right now, I've got the possibility of doing a statewide three-day bridge tournament, at least three weddings, the Ruidoso High School reunion and I think they're doing 40 years worth of classes."

Kofakis said the mayor, councilors and city hall officials know he is looking at the expanded use of the 60,000-square-foot facility that has about half its area for museum displays.

And the museum has what Kofakis said were "tremendous" printing capabilities. Contracting more printing jobs could mean a little more revenue for the facility. The printing business could be advertised to let potential customers know of the service. And the museum's high-tech Cope Learning Center, a videoconference facility, holds the opportunity for additional income.

"You know, we're going to do some different things to try to generate some revenue," Kofakis said.

On the expenditure side, additional museum volunteers would help. And Kofakis said he would like interns from ENMU-Ruidoso on a number of college-learning fronts, including marketing and information technology.

Kofakis has had a varied professional career. Right out of college, he was a stockbroker, the youngest in the U.S. at the time, he said. Several years later he was back in Wyoming working in the oil business and became a vice president at Patrick Petroleum before reaching the age of 30. That position resulted in a later transfer into a triple-A system of Indy car racing.

"I said I don't know anything about racing cars. And he said you don't need to, I've got a guy who knows the racing end but he can't write a complete sentence so I need you to do everything, all the business end of it."

That was a seven year stint. Kofakis worked for ESPN for a while doing a live auto racing show from Indianapolis. A move to Arizona saw him become the vice president for marketing for the Phoenix International Raceway. A later move to Albuquerque brought the position of director of marketing at Casino Hollywood for two years. As the marketing director, Kofakis said the casino captured three international marketing awards. He and his wife moved to Ruidoso in 2006 and he was hired to lead fundraising at the Hubbard Museum. In 2008 he became the museum's top official.